(Adds expectations for future policy, reserves data, oil)
By Toni Vorobyova and Andrey Ostroukh
MOSCOW, Jan 15 (Reuters) - Russia's rouble hit a historic low against the dollar on Thursday as the country sped on with a devaluation of the currency to adjust to lower oil prices and the worst economic outlook in a decade.
A central bank official confirmed the rouble's trading band had been widened for the fourth time this year and the 16th time since it began a series of mini-devaluations aimed at gradually weakening the currency in November.
"The main focus is to adjust the rouble to the lower oil
price, to balance the balance of payments and to preserve some
reserves, which have already fallen significantly," said
Yaroslav Lissovolik, chief strategist at Deutsche Bank.
"That is the main reason why they are speeding up the
weakening of the rouble...It is possible they are hoping to
conclude the devaluations this month," he added.
The rouble weakened to 36.81 versus the euro-dollar basket
which the central bank uses to guide monetary policy, 50 kopecks
beyond previous official support. It is now down 20.5 percent
from record peaks set in early August
Oil, a key export for Russia's resource-focused economy, has
lost over 60 percent over that time
The rouble has lost more in the first five trading days of 2009 than economists had expected over the whole of this year -- in late December they had forecast it to end 2009 at 36.24 to the basket [ID:nMOS005363].
ABOVE THE RED LINE
Thursday's move also took the rouble past the 32 mark
against the dollar for the first time in modern history
Russian President Dmitry Medvedev last year described 31-32 roubles to the dollar as a "red mark" at which Russians last saw the rouble relatively recently and which they are therefore ready to accept psychologically. Despite the long-term lows, Russia's gold and forex reserves have enabled it to keep the depreciation controlled in contrast to 1998 when the currency slumped 70 percent versus the dollar.
Still, mindful of that time, Russian citizens and companies have been shifting their spare cash into dollars and euros, putting further pressure on the rouble, with capital outflows from the currency hitting a record $130 billion last year.
As authorities strove to cushion the exchange rate from the capital flight, Russian reserves posted their first yearly fall in a decade. The cash pile, built up during years with high oil prices, has lost over a quarter of its value since August to stand at $426.5 billion on Jan. 9.
Before the current crisis, Russia had been moving slowly towards a floating rouble exchange for roughly 2011. The latest speeding up of the depreciation process has made some market participants wonder whether a free float could happen sooner.
Trades in rouble/dollar futures on Moscow's MICEX exchange hit 6,218 deals on Wednesday -- 40 percent more than the last record volume recorded the previous session -- as traders speculated about further rouble depreciation.
The popularity of futures has been increased by the central bank discouraging commercial banks from increasing their net positions in foreign currency.
One-year non-deliverable forwards (NDFs) now show the rouble
at around 41.55 to the dollar from 37.34 on Monday
"All the players of the derivatives market, from retail customer to institutional investors, are showing an interest in currency futures," said Alexander Dubrov at Alor brokerage.
But David Hauner, analyst at Bank of America, cautioned against betting on a free float or a big one-off move.
"They have already invested a lot of capital, spent a lot of reserves on this gradual process. Why would you suddenly want to let it go and toss out all the benefits you have had in terms of stabilising the expectations?," he said.
"If you look at the rouble versus other emerging market
currencies which are very much driven by commodities, such as
the rand
-- For a FACTBOX on rouble depreciation see [ID:nRUBFACTS] (Additional reporting by Yelena Fabrichnaya)